After spending aggressively during the first half of 2020, Traditional Telco operators (Incumbent and Wholesale) in North America curbed spending on optical and packet hardware during the fourth quarter. 4Q20 spending by these operators dropped almost 40%, according to the 4Q20 Transport Customer Markets Report from market research firm Cignal AI.
“North American network operators spent much less than usual in 4Q20 as they installed and used capacity acquired earlier in the year amidst COVID uncertainties,” said Scott Wilkinson, Lead Analyst for Transport Hardware. “This will change in 2021 as first Cloud and then Traditional operators resume normal spending patterns.”
Key Findings from the 4Q20 Transport Customer Markets Report:
- Fourth Quarter spending on optical hardware by Cloud & Colo expanded dramatically in APAC but declined in EMEA and North America.
- Ciena lost some sales of optical transport equipment to Cloud operators but maintained market leadership in 2020. Huawei (due to growth in APAC), Nokia, and Infinera all gained share.
- Huawei maintained market share leadership for the year in both optical and packet transport equipment sales to Traditional Telcos. The company has not yet seen market share declines from growing political pressure in EMEA.
- Enterprise & Government spending on optical hardware was resilient for the year; defying expectations that it would decline due to COVID pressures.
- Transport markets should return to growth in the second half of 2021 as COVID restrictions are lifted, operational difficulties are resolved, and businesses resume normal operations. Strength will be led by Cloud & Colo operators, followed by Traditional Telco operators.
https://cignal.ai/2021/03/north-american-traditional-telco-and-cloud-capex-drops-in-fourth-quarter/